The definition of a “flood” in Australia is “the covering of dry areas by water escaping from a natural watercourse such as a lake, river or creek, or an artificial body of water like a reservoir, canal or dam.”
Although major floods don’t tend to happen every year, they can destroy homes, businesses and entire communities, leaving behind damage and destruction.
Whether it’s from an overflowing river or creek, water can cause major damage to your property and belongings. While most Australian homes are located in areas that have little to no flood risk, approximately 80% of flood-related losses come from areas with past flood history.
If you live in a suburb that has suffered from inundation in the past, you need to ensure you have flood cover. It’s better to be safe than sorry and have a financial ‘umbrella’ over your house and possessions.
Before you purchase a home and contents policy, you need to find out whether your property is located in a flood risk zone. You can do so by looking up a relevant flood map for your area on the Bureau of Meteorology’s website.
Many insurers include flood cover as a compulsory part of a home and contents policy. However, a number of insurers might only cover some flood-related damage or none at all.
Remember that flood risk can be reflected in the cost of your home and contents premium. For example, if you own a home in a flood-prone area, you will typically pay a higher premium than homeowners outside of your area.
When you are choosing or renewing your home and contents policy, ensure you completely understand all the risks associated with floods. Make sure you thoroughly read through your policy and check if it includes flood damage cover or not. A home and contents policy typically lists events it doesn’t cover as exclusions.
If your home is at risk of flood damage, you should review the terms and conditions of your home and contents policy. They are usually outlined in your Policy Disclosure Statement (PDS).